Co-op Funeralcare

I was delighted to spend a morning attending a “town hall” meeting with colleagues from Co-op Funeralcare in Washington.  These are a relatively recent initiative to allow colleagues to be updated on progress in the business and get their feedback.  Colleagues from the Funeralcare support centre in Manchester are encouraged to get out to these local meetings around the country as a way of ensuring they keep in touch with the realities of life at the front line.

Thinking back through Co-op history making provision for a dignified funeral was a key concern of our members in the nineteenth century, so it is great that we continue to provide a high level of service in this sector to this day.

Recent progress

There is a remarkably good story to be told about our recent performance:

  • Growth in market share for the first time in five years 29% market share in sales of pre-need funeral plans – an excellent sign for the future Investment in new funeral homes – now over 1,000 around the UK – and in renewing our fleet of vehicles.
  • Launch of a low cost Simple Funeral to help address funeral poverty – which has forced competitors to respond in kind.
  • Announcement that we will provide funerals free of charge to any person who is 17 or younger, helping families at a time of acute grief:  an initiative that was recently commented on positively by the Prime Minister in the House of Commons.
  • Merger of the funerals business with our legal services operation, to maximise the synergies around will writing and probate work and provide a fuller service to our clients.
  • Development of new software by our Digital team that promises to transform the back office operations of Funeralcare, improving efficiency and releasing colleague time to care for bereaved families.

Under the leadership of Richard Lancaster and Robert McLachlan there is a new confidence and willingness to take the business forward with a clear focus on caring for families.  I was impressed by the positive comments and clear engagement of the colleagues at the briefing session.

Digital developments

At the session I was able to hear more about the Digital project (now being trialled in Edinburgh) from Regional Operations Manager, David Knowles.  David was seconded to the Digital team for six months, to make sure that someone who really understands the needs of the business was plugged into the systems design from the outset.  His enthusiasm for the potential improvements that would flow through was tangible, but I was especially pleased to note how positively other colleagues responded to the news:  embracing the change rather than fearing a new challenge.

High standards

 

It was also great to be given a tour of the Washington Funeralcare centre, the hub of a network of homes in the area.

Our senior manager Karen Crake, with nearly thirty years of experience, is justifiably proud of her purpose-built building, for it looks very smart and professional throughout.  They are the sort of premises in which the deceased can be handled in a dignified, respectful and professional manner, with strong standards clearly in place.  I heard several stories of funeral directors visiting from other non-Co-op organisations and being amazed by the quality of what we do.  Our main competitors, Dignity, in their recent results announcements called for more regulation of standards in the funeral industry.  I am confident that the Co-op already leads the way in this respect, and we would welcome the opportunity for standards to be improved across the board to benefit families everywhere.

So thanks to David, Karen (shown in the photo above, with me) and Funeralcare’s Head of Marketing Lorinda Robinson for making me so welcome!

Annual results

This week has been dominated by preparations for the release of the Co-op Group annual results for 2016 on Thursday.

The headlines have predictably focused on the decision to write down the value of our holding in the Co-operative Bank to nil.  Although the headlines say this means we just get it to be “worthless”, in fact it simply points to the impossibility of being able to put a clear value on the shares at a time when a sale is in prospect and uncertainty is being fuelled by (often misleading) press speculation.

Highlights

The newsworthiness of this item and the fact that the write-down turned our year end profit into a loss have hidden a lot of other good news:

  • All three of our core businesses (Food, Funerals and Insurance) have shown growth in both sales and market share.
  • Strong uptake of our new membership scheme, and re-engagement of many members with the Society.
  • Operating profit was up 32% year on year.
  • Underlying profit before tax was slightly down on last year, but ahead of our budget and unsurprising given the scale of re-investment we are making across our businesses and in re-launching our brand and membership proposition.

The full press release can be found here.

Future prospects

Our markets remain fiercely competitive, of course, so the next couple of years will be challenging.  Nevertheless we now have a stable and much stronger platform from which to develop and launch our plans for the future. It was interesting that the BBC coverage ended up focusing on what markets the Co-op might choose to enter next and disrupt.  That’s quite a change from just three years ago when everyone was wondering whether the Group could even survive!